Seoul Small Villa Transactions Exceeding 1 Million Won Monthly Rent Hit Record High

3,018 Seoul Small Villas with Monthly Rent Over 1 Million Won Last Year
78.3% Increase Compared to 2021
Preference for Monthly Rent Due to High Interest Rates and Jeonse Fraud Concerns

[Asia Economy Reporter Kim Min-young] The number of small villas in Seoul with monthly rents exceeding 1 million won has surged. This appears to be due to the increased interest burden on jeonse loan funds caused by interest rate hikes, as well as a preference for monthly rent amid concerns over jeonse fraud, leading to a rise in high-priced monthly rents.

(Photo by Gyeongjemanlab)

On the 15th, real estate information provider Economy Man Lab analyzed the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system and found that among 43,917 monthly rent transactions for small villas in Seoul with exclusive areas of 60㎡ or less in 2022, 3,018 transactions involved monthly rents exceeding 1 million won. This is the highest figure since the Ministry began compiling related statistics in 2011.

The sustained interest rate hikes since last year have sharply increased the interest on jeonse loan funds, and growing concerns over jeonse fraud have strengthened the preference for monthly rent. In fact, the number of jeonse transactions for small villas in Seoul last year was 67,541, a 7.2% decrease compared to 72,747 in 2021.

Small villas in Seoul with monthly rents exceeding 1 million won remained below 1,000 transactions annually from 2011 to 2019, then increased to 1,027 in 2020, 1,693 in 2021, and about 3,000 last year.

Among Seoul’s 25 autonomous districts, Gangnam-gu recorded the highest number of small villa transactions with monthly rents over 1 million won, with 791 transactions last year. This was followed by △Songpa-gu 458, △Seocho-gu 390, △Mapo-gu 166, △Gwangjin-gu 156, △Jungnang-gu 135, △Gangdong-gu 97, △Yongsan-gu 92, △Dongjak-gu 88, and △Gangseo-gu 87.

The small villa with the highest monthly rent last year was ‘Wooriel’ located in Yeoksam-dong, Gangnam-gu, Seoul, with an exclusive area of 27.95㎡. On April 6, 2022, a monthly rent contract was signed for a deposit of 8 million won and a monthly rent of 4.5 million won (4th floor).

‘Cheongdam Beomshin Calixville 3rd’ in Cheongdam-dong, Gangnam-gu, Seoul, with an exclusive area of 45.31㎡, was also contracted on February 4, 2022, for a deposit of 3.9 million won and a monthly rent of 3.9 million won (5th floor). Additionally, ‘Seocho-dong Acrium 2nd’ in Seocho-dong, Seocho-gu, with an exclusive area of 52.74㎡, had a monthly rent transaction on December 3 last year for a deposit of 40 million won and a monthly rent of 3.5 million won (3rd floor).

Hwang Han-sol, a research fellow at Economy Man Lab, said, "Due to jeonse fraud, there is a growing perception that living in monthly rent is safer even if one has a lump sum of money, and with the high interest on jeonse loan funds, the number of small villas with high monthly rents is increasing."